Data and Code for: Coase and Cap-and-Trade: Evidence on the Independence Property from the European Carbon Market

Principal Investigator(s): View help for Principal Investigator(s) Aleksandar Zaklan, DIW Berlin

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README.pdf	application/pdf	188.1 KB	01/13/2022 02:59:AM

Project Description

Summary: I examine the Coasean independence property in a large multinational cap-and-trade scheme for greenhouse gas emissions, the EU Emissions Trading System. I analyze whether emissions of power producers are independent from allowance allocations by leveraging a change in allocation policy for a difference-in-differences strategy. The evidence suggests that the independence property holds overall and for larger emitters and that firms respond to the loss in allocation by increasing allowance purchases. Suggestive evidence for small emitters indicates that trading costs or behavioral bias distort their emission decisions. However, their small emission share leaves the independence property intact at the sector level.

Scope of Project

Subject Terms: Coase theorem; independence property; cap-and-trade; EU ETS; greenhouse gas emissions

JEL Classification:
      L94 Electric Utilities
      Q52 Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
      Q54 Climate; Natural Disasters and Their Management; Global Warming
      Q58 Environmental Economics: Government Policy

Geographic Coverage: European Union

Universe: European firms in the power and heat sector regulated under the EU Emissions Trading System

Data Type(s): administrative records data; aggregate data; observational data; program source code

Methodology

Data Source:

European Commission, EU Transaction Log

EUETS.INFO - Track Carbon Trade in Europe

Eurostat

European University Institute

Open Power System Data

Global Energy Observatory

Bloomberg

Unit(s) of Observation: Firms, installations

Related Publications

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Published Versions

V1 [2023-04-07]

Export Metadata

Dublin Core

DDI 2.5

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